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Dallas Federal Reserve President and CEO Robert S. Kaplan

Dallas Federal Reserve Bank President Robert Kaplan said Tuesday he supports the U.S. central bank pressing forward "gradually and patiently" with interest-rate increases.

Mr. Kaplan was speaking at a gathering of the Economic Club of New York. He isn't currently a voting member of the interest-rate setting Federal Open Market Committee. That body met in late September and raised rates for a third time this year, lifting the central bank's short-term interest-rate target rate range to between 2% and 2.25%.

The recent jump in U.S. bond yields suggests “conflicting factors,” including a proposed new North America trade agreement, is clouding overall uncertainty among investors over future economic growth prospects, Federal Reserve Bank of Dallas President Robert Kaplan said on Tuesday.

U.S. Treasuries have been sold off recently as strong data fueled fears about rising inflation and a potentially faster pace of rate increases by the Fed. “I’m always careful not to over-read or over-attribute certain factors,” Kaplan added after addressing the Economic Club of New York.

The bond market is sending a pessimistic signal about the longer-term prospects of the U.S. economy, Dallas Federal Reserve President Robert Kaplan said Tuesday. All eyes on Wall Street have been tuned into the rapid acceleration of the 10-year Treasury yield in recent weeks as a sign that inflation is looming.

However, Kaplan told the Economic Club of New York that there's another important message coming, namely that the flattening of the so-called yield curve that has been taking place over the past several months is an indicator that the market sees growth slowing.